Global Manufacturing and China Conference : A First-Hand Perspective

zhejiang university 2By Prof. Mark Werwath, MEM Director

In the early part of September, I traveled as a guest of the senior faculty from Kellogg to the Global Manufacturing and China Conference at Zhejiang University just outside of Shanghai. It was quite an education for me to visit this huge, modern campus for the third ranked school in all of China.

At first, I thought that my presentation on the topic of entrepreneurship would be novel and leading edge―in fact, it quickly became clear to me that the school has jumped into entrepreneurship education in a big way; Zhejiang University already has incubators, hundreds of startups and many classes devoted to the topic of entrepreneurship.

zhejiang university

The economic challenges faced in China are far different from the challenges faced here in the United States. China has an overcapacity in both housing stock and manufacturing, and a dramatic shift is needed towards higher value services versus simply pursuing the low cost manufacturing strategy of the last 20 or so years. However, China also has numerous advantages, including very good infrastructure and high quality universities.

The advantage of exploring design thinking in conjunction with entrepreneurship is a US—and specifically —a McCormick advantage; we will see how this plays out in the global marketplace.  A simple example: it was clear to me that foreign-branded automobiles were far more prevalent in Shanghai than local cheaper brands, so the higher value, design intensive products (usually non-Chinese brands) are preferred by the locals more than 2 to 1. This was an affirmation of the McCormick strategy of putting design first, as clearly the people of China are voting with their checkbooks.

Zhejiang University National Science Park (ZUNSP)
Zhejiang University National Science Park (ZUNSP)

The fact that China is moving towards a service-based economy (and to some extent away from one that is manufacturing-based) is a titanic shift from the way things have worked for 20+ years. This creates opportunities for future US-based manufacturing (already starting) and of course presents the risk that China may actually become a threat in some new areas of competition.

At first it is easy to be overwhelmed by the scale of things in China and in Shanghai, but quickly it becomes apparent that a robust and diverse economy like what we enjoy in the United States will likely be more resilient in the years ahead, especially with the dramatic technological and social changes the world faces.  It was good to come home.

Zhejiang University National Science Park (ZUNSP)
Zhejiang University National Science Park (ZUNSP)

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